After years of planning and multiple delays, work soon should begin on a new transit center in downtown Duluth.

At a special meeting Wednesday, the Duluth Transit Authority’s board of directors unanimously signed off on an agreement that sets the guaranteed maximum price of the project at just shy of $27.3 million.

Higher-than-anticipated construction costs to the tune of about $32 million had forced the DTA to rethink the project, which includes a bus terminal, parking ramp and an area for commuters to stow bicycles.

Jim Heilig, the DTA’s director of administration, said his management team spent the past year working with Mortenson Construction (the project’s lead builder) and LHB (its designer) to get the budget back down to a manageable level.

The revamped project plans could allow for some original materials to be swapped out for less expensive alternatives

Heilig outlined more than $600,000 prospective changes, saying: “These are areas where we could save money, if we’re pinched.”

But he said there are some places where it wouldn’t pay to cut corners.

Jim Lasher, a consultant hired by the DTA to assist with the project, pointed to the center’s durable roof and terrazzo floors, as well as its heated outdoor walkways, as non-negotiable features that simply make good sense.

Dennis Jensen, the DTA’s general manager, explained the rationale for walkways with heated pavement as a way to minimize the risk of people falling on ice.

“One of our main ideas was to make this center as safe as possible, and we’re dealing with a lot of senior citizens, as well as people with disabilities,” he said.

In light of budget constraints, the transit center is being built with a smaller cushion of contingency funding than the 10 percent initially envisioned.

The plan approved Wednesday calls for a contingency fund of $1.1 million — or about 4.5 percent contracted cost of the project cost.

That’s less than half of the 10 percent contingency fund initially envisioned.

Heilig said his greatest concern involves encountering a major underground barrier to construction. In describing the center’s site at Michigan Street and Third Avenue West, he said: “It’s all dredged material that was brought in well before the 1920s.”

But with the guaranteed maximum price outlined in the agreement approved Wednesday, Lasher said that once the building begins to rise, any worries will be put to rest.

“After we’re out of the ground, we’re safe,” he said.

A recent independent cost analysis came back with an estimate only 2 percent lower than what Mortenson set forth in its maximum price.

“That gives us confidence that the price we’re getting from Mortenson is a valid number,” Heilig said.

Still, the DTA’s board of directors had questions.

“Do you believe this is absolutely the best we can do?” asked DTA board member Tony Orman before the vote Wednesday.

Jensen responded affirmatively, saying he believed the guaranteed maximum price in the agreement approved Wednesday was “as good as we can get.”

Heilig identified two of the biggest cost drivers as inflation, which added about $1 million to the price of the project since last year, and a $500,000 design change that placed the terminal’s bus operations on a single, flat plane without an incline as initially proposed.

As a fee for its services, Mortenson Construction will collect 4 percent of the total project cost up to a maximum of $1 million.

Meanwhile, LHB, the engineering and design firm overseeing the project, will receive $1.4 million for its services.

Funding for the project will come from multiple sources, including about $16 million from the federal government, $6 million in state bonding and $1.4 million in private investment. The DTA will foot the bill for most of the remainder, shouldering financial responsibility for about a 20 percent share of the total cost.

As you comment, please be respectful of other commenters and other viewpoints. Our goal with article comments is to provide a space for civil, informative and constructive conversations. We reserve the right to remove any comment we deem to be defamatory, rude, insulting to others, hateful, off-topic or reckless to the community. See our full terms of use here.

More in News

The drive-through jokes are starting to get a little old at Mama’s Pizza. For the second time in two years, the renowned Rice Street restaurant in St. Paul’s North End was struck by an errant driver, and this time there was a fair amount of damage. Still, owner Tony Mudzinski said he hopes to get back open in a week...

Helmets in hand, members of the St. Paul Bicycle Coalition arrived at St. Paul City Hall on Wednesday half expecting an easy victory. A plan to install bicycle lanes on little more than a half-mile of Stillwater Avenue, a busy east-west commuter route east of White Bear Avenue on St. Paul’s East Side, drew multiple supporters and a single opponent, who...

South Washington County Schools apologized and launched an investigation Thursday after personal and transportation data on most of the district’s 18,000-plus students was mistakenly emailed to parents. District administrators were starting to investigate the data release amid concerns about student safety and legal implications that could stem from the public release of private education data. The private data was contained...

Police say a 63-year-old maintenance worker died when he fell to the bottom of a hotel elevator shaft in Superior, Wis. The accident happened Tuesday evening at the Androy Hotel, authorities said. Hotel staff and other witnesses told police and medical staff that the elevator had been malfunctioning, and that the night maintenance worker was trying to fix it. He...

For months Maplewood-based 3M has maintained a few dozen workers in the CoCo collaborative co-working space in Lowertown’s St. Paul neighborhood. Across from the St. Paul Union Depot and the Metro Transit Green Line station, the collaborative work space has allowed a window onto downtown St. Paul, and onto projects that the national brand is keeping close to its vest....